Appeal details
Counselvise Citation
[2019] 117 COUNSELVISE.COM (IT) 5516 (ITAT-PUNE)
Assessee PAN
Bench
Appeal Number
Duration Of Justice
2 year(s) 3 month(s) 19 day(s)
Appellant
Respondent
Appeal Type
Income Tax Appeal
Pronouncement Date
03-06-2019
Appeal Filed By
Assessee
Order Result
Allowed
Bench Allotted
A
Assessment Year
2011-2012
Appeal Filed On
13-02-2017
Judgement Text
IN THE INCOME TAX APPELLATE TRIBUNAL B BENCH, PUN E . , , ! ' # , $ % BEFORE SHRI D. KARUNAKARA RAO, AM AND SHRI VIKAS AW ASTHY, JM !. / ITA NO. 376/PUN/2017 $' ( )( / ASSESSMENT YEAR : 2011-12 AMDOCS DEVELOPMENT CENTRE INDIA LLP (AS A SUCCESSOR OF AMDOCS DEVELOPMENT CENTRE INDIA PRIVATE LIMITED) (AS A SUCCESSOR OF AMDOCS BUSINESS SERVICES PRIVATE LIMITED) 6 TH FLOOR, TOWER-2, CYBERCITY, MAGARPATTA, HADAPSAR, PUNE-411 013. PAN : AAECA5803G ....... / APPELLANT ' / V/S. THE DEPUTY COMMISSIONER OF INCOME TAX, CIRCLE -1(1), PUNE. / RESPONDENT !. / ITA NO. 398/PUN/2017 $' ( )( / ASSESSMENT YEAR : 2011-12 THE DEPUTY COMMISSIONER OF INCOME TAX, CIRCLE -1(1), PUNE. ....... / APPELLANT ' / V/S. M/S. AMDOCS DEVELOPMENT CENTRE INDIA PVT. LTD. (EARLIER KNOWN AS M/S. AMDOCS BUSINESS SERVICES PVT. LTD.) 6 TH FLOOR, TOWER-2, CYBERCITY, MAGARPATTA, HADAPSAR, PUNE-411 013. PAN : AAECA5803G / RESPONDENT 2 ITA NOS.376 & 398/PUN/2017 A.Y.2011-12 ASSESSEE BY : SHRI P.J. PARDIWALLA & SHRI DARPAN KIRPALANI REVENUE BY : SHRI S.B. PRASAD, CIT-DR / DATE OF HEARING : 12.03.2019 / DATE OF PRONOUNCEMENT : 03.06.2019 * / ORDER PER VIKAS AWASTHY, JM THESE CROSS APPEALS BY THE ASSESSEE AND THE REVENUE ARE DIRECTED AGAINST THE ORDER OF COMMISSIONER OF INCOME TAX (APPEALS) -1, PUNE DATED 22.11.2016 FOR THE ASSESSMENT YEAR 2011-12. 2. THE BRIEF FACTS OF THE CASE AS EMANATING FROM RECORDS ARE: THE ASSESSEE IS ENGAGED IN PRODUCT DEVELOPMENT AS WELL AS MA RKETING, CUSTOMIZATION, ON-GOING SUPPORT, WARRANTY SERVICES, ETC. T HE ASSESSEE DURING THE PERIOD RELEVANT TO THE ASSESSMENT YEAR UND ER APPEAL HAD ENTERED INTO CERTAIN INTERNATIONAL TRANSACTIONS WITH ASSOCIATED EN TERPRISES. FOR BENCHMARKING INTERNATIONAL TRANSACTIONS, REFERENCE WAS MAD E TO TRANSFER PRICING OFFICER (TPO) U/S.92CA(3) OF THE INCOME TAX ACT, 196 1 (HEREINAFTER REFERRED TO AS THE ACT). THE ASSESSING OFFICER AFTER RECE IVING THE ORDER DATED 10.09.2014 FROM TPO MADE ADJUSTMENT IN THE INTERNATIONAL T RANSACTIONS AS PROPOSED AND ALSO MADE CERTAIN OTHER ADDITIONS/DISALLOWANCES. 3. AGGRIEVED AGAINST THE ASSESSMENT ORDER DATED 27.03.2 015, THE ASSESSEE FILED APPEAL BEFORE THE COMMISSIONER OF INCOME TA X (APPEALS) INTER ALIA CHALLENGING VALIDITY OF ASSESSMENT ORDER ON THE GROUND THAT IT WAS 3 ITA NOS.376 & 398/PUN/2017 A.Y.2011-12 PASSED IN THE NAME OF NON-EXISTENT ENTITY. THE COMMISSIONE R OF INCOME TAX (APPEALS) VIDE IMPUGNED ORDER DISMISSED THE GROUNDS RAISED B Y THE ASSESSEE CHALLENGING VALIDITY OF ASSESSMENT ORDER. ON THE MERITS OF TH E ADDITION, THE COMMISSIONER OF INCOME TAX (APPEALS) GRANTED PART RELIEF TO THE ASSESSEE. AGAINST THE FINDINGS OF COMMISSIONER OF INCOME TAX (APPEALS), B OTH, THE ASSESSEE AND THE REVENUE ARE IN APPEAL BEFORE TRIBUNAL. 4. THE ASSESSEE IN APPEAL BEFORE THE TRIBUNAL HAS RAISED THREE GROUNDS. GROUND NO.1 OF APPEAL IS AGAINST THE ASSESSMENT ORDER MA DE IN THE NAME OF NON-EXISTENT ENTITY. GROUND NO.2 OF APPEAL IS AGAINST THE ADJUSTMENT MADE U/S .10A(7) READ WITH SECTION 80IA(10) OF THE ACT. GROUND NO. 3 OF THE APPEAL IS AGAINST LEVY OF INTEREST U/S.2 34B OF THE ACT. 5. THE DEPARTMENT IN APPEAL BEFORE THE TRIBUNAL HAS CHALLE NGED THE FINDINGS OF COMMISSIONER OF INCOME TAX (APPEALS) IN GRANTING PA RT RELIEF TO THE ASSESSEE BY ADOPTING PROFIT MARGIN AT 20% INSTEAD OF 12.95% COMPUTED BY THE ASSESSING OFFICER FOR WORKING OF DISALLOWANCE OF EXCESS PROFIT U/S.10A(7) R.W.S. 80IA(10) OF THE ACT. THE DEPARTMENT HAS ALSO ASSAILED THE MANNER OF COMPUTING DEDUCTION U/S.10A OF THE ACT. 6. BEFORE ADVERTING TO THE MERITS OF THE ADDITION, IT WOULD BE IMPERATIVE TO FIRST DECIDE THE LEGAL ISSUE RAISED BY ASSESSEE CHALLENGIN G VALIDITY OF ASSESSMENT ORDER PURPORTEDLY MADE IN THE NAME OF NON-EXISTENT ENTITY. 4 ITA NOS.376 & 398/PUN/2017 A.Y.2011-12 7. SHRI P.J. PARDIWALLA APPEARING ON BEHALF OF THE ASSESSEE NARRATING THE SEQUENCE OF EVENTS SUBMITTED THAT THE INITIAL NAME OF THE ASSESSEE-COMPANY WAS AMDOCS BUSINESS SERVICES PRIVATE LIMITED. THEREAFTE R, THE SAID COMPANY WAS MERGED WITH AMDOCS DEVELOPMENT CENTRE IN DIA PRIVATE LIMITED W.E.F.1 ST APRIL, 2012 VIDE ORDER OF HON'BLE BOMBAY HIGH COURT DATED 10 TH MAY, 2013. THE ASSESSEE VIDE COMMUNICATION DATED 23 RD JULY, 2013 INTIMATED THE ASSESSING OFFICER REGARDING MERGER OF AMDOCS BUSINESS SERVICES PRIVATE LIMITED WITH AMDOCS DEVELOPMENT CENTR E INDIA PRIVATE LIMITED. THUS, FROM THE DATE OF MERGER AS PER ORDER OF TH E HON'BLE BOMBAY HIGH COURT, AMDOCS BUSINESS SERVICES PRIVATE LIMITED CEA SES TO EXIST. HOWEVER, DESPITE AN INTIMATION OF MERGER BY THE ASSESSEE TO THE ASSESSING OFFICER, THE ASSESSING OFFICER ISSUED NOTICE U/S.143(2) OF THE ACT IN THE NA ME OF ERSTWHILE AMDOCS BUSINESS SERVICES PRIVATE LIMITED ON 8 TH AUGUST, 2013. THE ASSESSEE AGAIN VIDE COMMUNICATION DATED 17 TH SEPTEMBER, 2013 INTIMATED THE ASSESSING OFFICER REGARDING MERGER OF THE COM PANY. THE ASSESSING OFFICER WITHOUT TAKING NOTICE OF THE REPEATED INTIM ATIONS BY THE ASSESSEE FINALIZED THE ASSESSMENT U/S.143(3) R.W.S.92CA OF TH E ACT ON 27.03.2015 IN THE NAME OF ERSTWHILE AMDOCS BUSINESS SERV ICES PRIVATE LIMITED THAT WAS NOT IN EXISTENCE ON THE DATE OF FINALIZATIO N OF ASSESSMENT ORDER. THE LD. AR SUBMITTED THAT DURING ASSESSMENT PROCE EDINGS, VARIOUS COMMUNICATIONS WERE MADE BY THE ASSESSEE TO ASSESSING OFFICER AND ALL THE COMMUNICATIONS WERE MADE IN THE NAME OF AMDOCS DEVELOPM ENT CENTRE INDIA PRIVATE LIMITED. IN ALL SUCH COMMUNICATIONS, IT WAS SPE CIFICALLY MENTIONED IN TITLE THAT IT IS A SUCCESSOR OF AMDOCS BUSINE SS SERVICES PRIVATE LIMITED. THE LD. AR REFERRED TO ONE SUCH COMMUNICA TION DATED 12.03.2015 AT PAGE 53 OF THE PAPER BOOK. 5 ITA NOS.376 & 398/PUN/2017 A.Y.2011-12 7.1 THE LD. AR SUBMITTED THAT THE COMMISSIONER OF INCOME TAX (APPEALS) REJECTED THE CONTENTIONS OF THE ASSESSEE ON THE GROUN D THAT IN THE COMMUNICATION, RELEVANT ASSESSMENT YEAR WAS NOT MENTIONE D AND THUS, INTIMATION MADE TO THE ASSESSING OFFICER REGARDING CHANGE O F NAME/MERGER WAS JUST A PASSIVE INFORMATION. THE LD. AR SUBMITTED THAT IT IS A WELL SETTLE LAW THAT ASSESSMENT MADE IN THE NAME OF NON-EXISTENT EN TITY IS UNSUSTAINABLE AND WITHOUT JURISDICTION. IN SUPPORT OF HIS SU BMISSIONS, THE LD. AR PLACED RELIANCE ON THE FOLLOWING DECISIONS: I) JITENDRA CHANDRALAL NAVLANI VS. UNION OF INDIA, REPORTED IN 80 TAXMANN.COM 107 ( BOMBAY) II) SPICE ENTERTAINMENT LIMITED VS. COMMISSIONER OF SERVICE TAX IN ITA NO. 475 OF 2011 AND ITA NO.476 OF 2011 8. ON THE OTHER HAND, SHRI S.B. PRASAD REPRESENTING THE DEPARTMENT VEHEMENTLY DEFENDED THE IMPUGNED ORDER. THE LD. DR SUBM ITTED THAT THE ORDER PASSED BY THE ASSESSING OFFICER HAS MERGED WITH TH E ORDER OF COMMISSIONER OF INCOME TAX (APPEALS). THE COMMISSIONER OF IN COME TAX (APPEALS) HAS PASSED THE APPELLATE ORDER IN THE CORRECT N AME OF ASSESSEE COMPANY. HENCE, THE OBJECTION RAISED BY THE ASSESSEE IN GROUND NO.1 OF APPEAL DOES NOT SURVIVE. 9. WE HAVE HEARD THE SUBMISSIONS MADE BY REPRESENTATIVE S OF RIVAL SIDES AND HAVE PERUSED THE ORDERS OF AUTHORITIES BELOW. IT IS NO MORE RES-INTEGRA THAT THE ORDER PASSED IN THE NAME OF NON-EXISTENT ENTIT Y IS INVALID AND UNSUSTAINABLE IN THE EYE OF LAW. THE COMPANY AMDOCS BUSIN ESS SERVICES PRIVATE LIMITED WAS MERGED WITH AMDOCS DEVELOPMENT CEN TRE INDIA PRIVATE LIMITED VIDE ORDER OF HON'BLE BOMBAY HIGH COURT D ATED 10 TH MAY, 2013, APPROVING THE SCHEME OF AMALGAMATION W.E.F. 1 ST APRIL, 2012. THUS, 6 ITA NOS.376 & 398/PUN/2017 A.Y.2011-12 AFTER THE DATE OF MERGER HAS BEEN NOTIFIED IN THE ORDER OF HON'BLE HIGH COURT, MERGED COMPANY CEASES TO SUBSIST. THE ASSESSEE INTIMATE D ASSESSING OFFICER ABOUT MERGER OF THE TWO COMPANIES VIDE COMMUNICATIO N DATED 23 RD JULY, 2013. THE COPY OF SAID COMMUNICATION BY ASSESSEE TO ASSESSING OFFICER IS PLACED AT PAGE 205 OF THE PAPER BOOK. DESPITE INT IMATION REGARDING MERGER OF AMDOCS BUSINESS SERVICES PRIVATE LIMITED WITH AMDOCS DEVELOPMENT CENTRE INDIA PRIVATE LIMITED, THE ASSESSING O FFICER ISSUED NOTICE U/S.143(2) OF THE ACT TO THE ASSESSEE COMPANY IN THE NAME OF ERSTWHILE COMPANY WHICH WAS NOT IN EXISTENCE ON 8 TH AUGUST, 2013. WE FURTHER OBSERVE THAT DURING THE COURSE OF ASSESSMENT P ROCEEDINGS, VARIOUS COMMUNICATIONS WERE MADE BY ASSESSEE TO THE ASSESSING OFFICER IN THE NAME OF NEW COMPANY AND IT WAS SPECIFICALLY MENTIONED IN EA CH SUCH COMMUNICATION THAT ERSTWHILE AMDOCS BUSINESS SERVICES PR IVATE LIMITED HAS BEEN MERGED WITH AMDOCS DEVELOPMENT CENTRE INDIA PRIVATE LIMITED. THE ASSESSEE DISCHARGED HIS ONUS OF INTIMATING THE FACT OF MERGER OF COMPANY WITH AMDOCS DEVELOPMENT CENTRE INDIA PRIVATE L IMITED. THE ASSESSING OFFICER DESPITE HAVING INTIMATION REGARDING MERGER OF AMDOCS BUSINESS SERVICES PRIVATE LIMITED WITH AMDOCS DEVELOPMEN T CENTRE INDIA PRIVATE LIMITED, PASSED ASSESSMENT ORDER IN THE NAME OF COMPANY WHICH HAD CEASED TO EXIST ON THE DATE OF PASSING ASSESSMEN T ORDER. THE ASSESSMENT MADE IN THE NAME OF NON-EXISTENT COMPANY IS INVALID AND UNSUSTAINABLE IN THE EYE OF LAW. 10. THE HON'BLE JURISDICTIONAL HIGH COURT IN THE CASE OF JIT ENDRA CHANDRALAL NAVLANI VS. UNION OF INDIA (SUPRA.) HAS HELD THAT ISS UANCE OF NOTICE (U/S.148 OF THE ACT) AND ASSESSMENT ORDER IN THE N AME OF A NON EXISTING ENTITY IS WITHOUT JURISDICTION. 7 ITA NOS.376 & 398/PUN/2017 A.Y.2011-12 11. THE HON'BLE DELHI HIGH COURT IN THE CASE OF SPICE ENTER TAINMENT LTD. VS. COMMISSIONER OF SERVICE TAX (SUPRA.) WHILE DEALING WITH THE CASE OF COMPANY THAT HAD CEASED TO EXIST AFTER MERGER AND THE ASSESSMENT ORDER WAS PASSED IN THE NAME OF NON-EXISTENT ENTITY HELD AS UNDER: 8. A COMPANY INCORPORATED UNDER THE INDIAN COMPANI ES ACT IS A JURISTIC PERSON. IT TAKES ITS BIRTH AND GETS LIFE W ITH THE INCORPORATION. IT DIES WITH THE DISSOLUTION AS PER THE PROVISIONS OF THE COMPANIES ACT. IT IS TRITE LAW THAT ON AMALGAMATION, THE AMALGAMATING COMPANY CEASES TO EXIST IN THE EYES OF LAW. THIS POSITION IS EVEN ACCEPTED BY THE TRIBUNAL IN PARA-14 OF ITS ORDER EXTRACTED ABOVE. H AVING REGARD THIS CONSEQUENCE PROVIDED IN LAW, IN NUMBER OF CASES, TH E SUPREME COURT HELD THAT ASSESSMENT UPON A DISSOLVED COMPANY IS IM PERMISSIBLE AS THERE IS NO PROVISION IN INCOME-TAX TO MAKE AN ASSE SSMENT THEREUPON. IN THE CASE OF SARASWATI INDUSTRIAL SYNDICATE LTD. VS. CIT, 186 ITR 278 THE LEGAL POSITION IS EXPLAINED IN THE FOLLOWING TE RMS: 'THE QUESTION IS WHETHER ON THE AMALGAMATION OF THE INDIAN SUGAR COMPANY WITH THE APPELLANT COMPANY, THE INDIA N SUGAR COMPANY CONTINUED TO HAVE ITS ENTITY AND WAS ALIVE FOR THE PURPOSES OF SECTION 41(1) OF THE ACT. THE AMALGAMAT ION OF THE TWO COMPANIES WAS EFFECTED UNDER THE ORDER OF THE H IGH COURT IN PROCEEDINGS UNDER SECTION 391 READ WITH SECTION 394 OF THE COMPANIES ACT. THE SARASWATI INDUSTRIAL SYNDICATE, THE TRANS FREE COMPANY WAS A SUBSIDIARY OF THE INDIAN SUGAR C OMPANY, NAMELY, THE TRANSFEROR COMPANY. UNDER THE SCHEME OF AMALGAMATION THE INDIAN SUGAR COMPANY STOOD DISSOLV ED ON 29TH OCTOBER, 1962 AND IT CEASED TO BE IN EXISTENCE THEREAFTER. THOUGH THE SCHEME PROVIDED THAT THE TRANSFEREE COMP ANY THE SARASWATI INDUSTRIAL SYNDICATE LTD. UNDERTOOK TO ME ET ANY LIABILITY OF THE INDIAN SUGAR COMPANY WHICH THAT CO MPANY INCURRED OR IT COULD INCUR, ANY LIAIBLITY, BEFORE T HE DISSOLUTION OR NOT THEREAFTER. GENERALLY, WHERE ONLY ONE COMPANY IS INVOLVED IN CH ANGE AND THE RIGHTS OF THE SHARE HOLDERS AND CREDITORS ARE VARIE D, IT AMOUNTS TO RECONSTRUCTION OR REORGANISATION OR SCHEME OF ARRAN GEMENT. IN AMALGAMATION TWO OR MORE COMPANIES ARE FUSED INTO O NE BY MERGER OR BY TAKING OVER BY ANOTHER. RECONSTRUCTION OR AMALGA MATION HAS NO PRECISE LEGAL MEANING. THE AMALGAMATION IS A BLENDI NG OF TWO OR MORE EXISTING UNDERTAKINGS INTO ONE UNDERTAKING, THE SHA RE HOLDERS OF EACH BLENDING COMPANY BECOME SUBSTANTIALLY THE SHARE HOL DERS IN THE COMPANY WHICH IS TO CARRY ON THE BLENDED UNDERTAKIN GS. THERE MAY BE AMALGAMATION EITHER BY THE TRANSFER OF TWO OR MORE UNDERTAKINGS TO A NEW COMPANY, OR BY THE TRANSFER OF ONE OR MORE UNDE RTAKINGS TO AN EXISTING COMPANY. STRICTLY AMALGAMATION DOES NOT CO VER THE MERE ACQUISITION BY A COMPANY OF THE SHARE CAPITAL OF OT HER COMPANY WHICH REMAINS IN EXISTENCE AND CONTINUES ITS UNDERTAKING BUT THE CONTEXT IN WHICH THE TERM IS USED MAY SHOW THAT IT IS INTENDED TO INCLUDE SUCH AN ACQUISITION. SEE HALSBURYS LAWS OF ENGLAND 4TH EDIT ION VOL. 7 PARA 8 ITA NOS.376 & 398/PUN/2017 A.Y.2011-12 1539. TWO COMPANIES MAY JOIN TO FORM A NEW COMPANY, BUT THERE MAY BE ABSORPTION OR BLENDING OF ONE BY THE OTHER, BOTH AMOUNT TO AMALGAMATION. WHEN TWO COMPANIES ARE MERGED AND ARE SO JOINED, AS TO FORM A THIRD COMPANY OR ONE IS ABSORBED INTO ONE OR BLENDED WITH ANOTHER, THE AMALGAMATING COMPANY LOSES ITS ENTITY. ' 9. THE COURT REFERRED TO ITS EARLIER JUDGMENT IN GE NERAL RADIO AND APPLIANCES CO. LTD. VS. M.A. KHADER (1986) 60 COMP CASE 1013. IN VIEW OF THE AFORESAID CLINCHING POSITION IN LAW, IT IS DIFFICULT TO DIGEST THE CIRCUITOUS ROUTE ADOPTED BY THE TRIBUNAL HOLDING TH AT THE ASSESSMENT WAS IN FACT IN THE NAME OF AMALGAMATED COMPANY AND THERE WAS ONLY A PROCEDURAL DEFECT. 10. SECTION 481 OF THE COMPANIES ACT PROVIDES FOR D ISSOLUTION OF THE COMPANY. THE COMPANY JUDGE IN THE HIGH COURT CAN OR DER DISSOLUTION OF A COMPANY ON THE GROUNDS STATED THEREIN. THE EFF ECT OF THE DISSOLUTION IS THAT THE COMPANY NO MORE SURVIVES. T HE DISSOLUTION PUTS AN END TO THE EXISTENCE OF THE COMPANY. IT IS HELD IN M.H. SMITH (PLANT HIRE) LTD. VS. D.L. MAINWARING (T/A INSHORE), 1986 BCLC 342 (CA) THAT 'ONCE A COMPANY IS DISSOLVED IT BECOMES A NON-EXIST ENT PARTY AND THEREFORE NO ACTION CAN BE BROUGHT IN ITS NAME. THU S AN INSURANCE COMPANY WHICH WAS SUBROGATED TO THE RIGHTS OF ANOTH ER INSURED COMPANY WAS HELD NOT TO BE ENTITLED TO MAINTAIN AN ACTION IN THE NAME OF THE COMPANY AFTER THE LATTER HAD BEEN DISSOLVED' . 11. AFTER THE SANCTION OF THE SCHEME ON 11TH APRIL, 2004, THE SPICE CEASES TO EXIT W.E.F. 1ST JULY, 2003. EVEN IF SPICE HAD FILED THE RETURNS, IT BECAME INCUMBENT UPON THE INCOME TAX AUTHORITIES TO SUBSTITUTE THE SUCCESSOR IN PLACE OF THE SAID DEAD PERSON . WHEN NOTICE UNDER SECTION 143 (2) WAS SENT, THE APPELLANT/AMALG AMATED COMPANY APPEARED AND BROUGHT THIS FACT TO THE KNOWLEDGE OF THE AO. HE, HOWEVER, DID NOT SUBSTITUTE THE NAME OF THE APPELLA NT ON RECORD. INSTEAD, THE ASSESSING OFFICER MADE THE ASSESSMENT IN THE NAME OF M/S SPICE WHICH WAS NON EXISTING ENTITY ON THAT DAY . IN SUCH PROCEEDINGS AND ASSESSMENT ORDER PASSED IN THE NAME OF M/S SPICE WOULD CLEARLY BE VOID. SUCH A DEFECT CANNOT BE TREA TED AS PROCEDURAL DEFECT. MERE PARTICIPATION BY THE APPELLANT WOULD B E OF NO EFFECT AS THERE IS NO ESTOPPEL AGAINST LAW. 12. ONCE IT IS FOUND THAT ASSESSMENT IS FRAMED IN T HE NAME OF NON- EXISTING ENTITY, IT DOES NOT REMAIN A PROCEDURAL IR REGULARITY OF THE NATURE WHICH COULD BE CURED BY INVOKING THE PROVISIONS OF SECTION 292BOF THE ACT. SECTION 292B OF THE ACT READS AS UNDER:- '292B. NO RETURN OF INCOME ASSESSMENT, NOTICE, SUMM ONS OR OTHER PROCEEDINGS FURNISHED OR MADE OR ISSUE OR TAK EN OR PURPORTED TO HAVE BEEN FURNISHED OR MADE OR ISSUED OR TAKEN IN PURSUANCE OF ANY OF THE PROVISIONS OF THIS ACT SHAL L BE INVALID OR SHALL BE DEEMED TO BE INVALID MERELY BY REASONS OF ANY MISTAKE, DEFECT OR OMISSION IN SUCH RETURN OF INCOME, ASSESS MENT, NOTICE, SUMMONS OR OTHER PROCEEDING IF SUCH RETURN OF INCOM E, ASSESSMENT, NOTICE, SUMMONS OR OTHER PROCEEDINGS IS IN SUBSTANCE AND EFFECT IN CONFORMITY WITH OR ACCORDIN G TO THE INTENT AND PURPOSE OF THIS ACT.' 13. THE PUNJAB & HARYANA HIGH COURT STATED THE EFFE CT OF THIS PROVISION IN CIT VS. NORTON MOTORS, 275 ITR 595 IN THE FOLLOW ING MANNER:- 9 ITA NOS.376 & 398/PUN/2017 A.Y.2011-12 'A READING OF THE ABOVE REPRODUCED PROVISION MAKES IT CLEAR THAT A MISTAKE, DEFECT OR OMISSION IN THE RETURN OF INCO ME, ASSESSMENT, NOTICE, SUMMONS OR OTHER PROCEEDING IS NOT SUFFICIENT TO INVALIDATE AN ACTION TAKEN BY THE COM PETENT AUTHORITY, PROVIDED THAT SUCH RETURN OF INCOME, ASS ESSMENT, NOTICE, SUMMONS OR OTHER PROCEEDING IS IN SUBSTANCE AND EFFECT IN CONFORMITY WITH OR ACCORDING TO THE PROVISIONS O F THE ACT. TO PUT IT DIFFERENTLY, SECTION 292B CAN BE RELIED UPON FOR RESISTING A CHALLENGE TO THE NOTICE, ETC., ONLY IF THERE IS A TECHNICAL DEFECT OR OMISSION IN IT. HOWEVER, THERE IS NOTHING IN THE PLAIN LANGUAGE OF THAT SECTION FROM WHICH IT CAN BE INFERRED THAT THE SAME CAN BE RELIED UPON FOR CURING A JURISDICTIONAL DEFECT I N THE ASSESSMENT NOTICE, SUMMONS OR OTHER PROCEEDING. IN OTHER WORDS, IF THE NOTICE, SUMMONS OR OTHER PROCEEDING T AKEN BY AN AUTHORITY SUFFERS FROM AN INHERENT LACUNA AFFECTING HIS/ITS JURISDICTION, THE SAME CANNOT BE CURED BY HAVING RE SORT TO SECTION 292B. 14. THE ISSUE AGAIN CROPPED UP BEFORE THE COURT IN CIT VS. HARJINDER KAUR (2009) 222 CTR 254 (P&H). THAT WAS A CASE WHER E RETURN IN QUESTION FILED BY THE ASSESSEE WAS NEITHER SIGNED B Y THE ASSESSEE NOR VERIFIED IN TERMS OF THE MANDATE OF SECTION 140 OF THE ACT. THE COURT WAS OF THE OPINION THAT SUCH A RETURN CANNOT BE TRE ATED AS RETURN EVEN A RETURN FILED BY THE ASSESSEE AND THIS INHERENT DE FECT COULD NOT BE CURED INSPITE OF THE DEEMING EFFECT OF SECTION 292B OF THE ACT. THEREFORE, THE RETURN WAS ABSOLUTELY INVALID AND AS SESSMENT COULD NOT BE MADE ON A INVALID RETURN. IN THE PROCESS, THE CO URT OBSERVED AS UNDER:- 'HAVING GIVEN OUR THOUGHTFUL CONSIDERATION TO THE S UBMISSION ADVANCED BY THE LEARNED COUNSEL FOR THE APPELLANT, WE ARE OF THE VIEW THAT THE PROVISIONS OF SECTION 292B OF THE 1961 ACT DO NOT AUTHORIZE THE AO TO IGNORE A DEFECT OF A SUBSTA NTIVE NATURE AND IT IS, THEREFORE, THAT THE AFORESAID PROVISION CATEGORICALLY RECORDS THAT A RETURN WOULD NOT BE TREATED AS INVAL ID, IF THE SAME 'IN SUBSTANCE AND EFFECT IS IN CONFORMITY WITH OR A CCORDING TO THE INTENT AND PURPOSE OF THIS ACT'. INSOFAR AS THE RET URN UNDER REFERENCE IS CONCERNED, IN TERMS OF SECTION 140 OF THE 1961 ACT, THE SAME CANNOT BE TREATED TO BE EVEN A RETURN FILE D BY THE RESPONDENT ASSESSEE, AS THE SAME DOES NOT EVEN BEAR HER SIGNATURES AND HAD NOT EVEN BEEN VERIFIED BY HER. I N THE AFORESAID VIEW OF THE MATTER, IT IS NOT POSSIBLE FO R US TO ACCEPT THAT THE RETURN ALLEGEDLY FILED BY THE ASSESSEE WAS IN SUBSTANCE AND EFFECT IN CONFORMITY WITH OR ACCORDING TO THE I NTENT AND PURPOSE OF THIS ACT. THUS VIEWED, IT IS NOT POSSIBL E FOR US TO ACCEPT THE CONTENTION ADVANCED BY THE LEARNED COUNS EL FOR THE APPELLANT ON THE BASIS OF SECTION 292B OF THE 1 961 ACT. THE RETURN UNDER REFERENCE, WHICH HAD BEEN TAKEN IN TO CONSIDERATION BY THE REVENUE, WAS AN ABSOLUTELY INV ALID RETURN AS IT HAD A GLARING INHERENT DEFECT WHICH COULD NOT BE CURED IN SPITE OF THE DEEMING EFFECT OF SECTION 292B OF THE 1961 ACT.' 15. LIKEWISE, IN THE CASE OF SRI NATH SURESH CHAND RAM NARESH VS. CIT (2006) 280 ITR 396, THE ALLAHABAD HIGH COURT HE LD THAT THE ISSUE OF NOTICE UNDER SECTION 148 OF THE INCOME TAX ACT I S A CONDITION PRECEDENT TO THE VALIDITY OF ANY ASSESSMENT ORDER T O BE PASSED UNDER SECTION 147 OF THE ACT AND WHEN SUCH A NOTICE IS NOT ISSUED AND ASSESSMENT MADE, SUCH A DEFECT CANNOT BE TREATED AS CURED 10 ITA NOS.376 & 398/PUN/2017 A.Y.2011-12 UNDER SECTION 292B OF THE ACT. THE COURT OBSERVED T HAT THIS PROVISIONS CONDONES THE INVALIDITY WHICH ARISES MERELY BY MIST AKE, DEFECT OR OMISSION IN A NOTICE, IF IN SUBSTANCE AND EFFECT IT IS IN CONFORMITY WITH OR ACCORDING TO THE INTENT AND PURPOSE OF THIS ACT. SI NCE NO VALID NOTICE WAS SERVED ON THE ASSESSEE TO REASSESS THE INCOME, ALL THE CONSEQUENT PROCEEDINGS WERE NULL AND VOID AND IT WAS NOT A CAS E OF IRREGULARITY. THEREFORE, SECTION 292B OF THE ACT HAD NO APPLICATI ON. 16. WHEN WE APPLY THE RATIO OF AFORESAID CASES TO T HE FACTS OF THIS CASE, THE IRRESISTIBLE CONCLUSION WOULD BE PROVISIONS OF SECTION 292B OF THE ACT ARE NOT APPLICABLE IN SUCH A CASE. THE FRAMING OF ASSESSMENT AGAINST A NON-EXISTING ENTITY/PERSON GOES TO THE RO OT OF THE MATTER WHICH IS NOT A PROCEDURAL IRREGULARITY BUT A JURISD ICTIONAL DEFECT AS THERE CANNOT BE ANY ASSESSMENT AGAINST A DEAD PERS ON. 17. THE ORDER OF THE TRIBUNAL IS, THEREFORE, CLEARL Y UNSUSTAINABLE. WE, THUS, DECIDE THE QUESTIONS OF LAW IN FAVOUR OF THE ASSESSEE AND AGAINST THE REVENUE AND ALLOW THESE APPEALS. 12. THUS, IN VIEW OF THE FACTS OF THE CASE AND CASE LAWS D ISCUSSED ABOVE, WE FIND MERIT IN GROUND NO.1 RAISED BY ASSESSEE CHALLENGING VALIDITY OF ASSESSMENT IN THE NAME OF NON-EXISTENT ENTITY. THUS, ASSE SSMENTS ORDER DATED 27.03.2015 IN THE NAME OF ERSTWHILE AMDOCS BUSINES S SERVICES PRIVATE LIMITED IS INVALID AND WITHOUT JURISDICTION AS THE SA ID COMPANY HAD CEASED TO EXIST ON THE DATE OF ASSESSMENT ORDER. THE ASSESSMENT ORDER PASSED IN THE NAME OF NON-EXISTENT ENTITY I.E. AMDOCS BUS INESS SERVICES PRIVATE LIMITED IS INVALID AND SUBSEQUENT PROCEEDINGS ARISIN G THERE FROM ARE VITIATED. HENCE, GROUND NO.1 RAISED IN APPEAL BY THE ASSESSEE IS ALLOWED. 13. SINCE GROUND NO.1 RAISED IN APPEAL BY ASSESSEE IS ALLO WED, THE REMAINING GROUNDS RAISED BY ASSESSEE IN APPEAL HAVE BEC OME ACADEMIC AND HENCE, ARE NOT DELIBERATED UPON. 11 ITA NOS.376 & 398/PUN/2017 A.Y.2011-12 14. THE APPEAL OF REVENUE DOES NOT SURVIVE AS THE A SSESSMENT ORDER FROM WHICH IT EMANATES, HAS BEEN HELD TO BE INVALID. THEREFORE, TH E SAME HAS TO BE DISMISSED. WE HOLD AND DIRECT ACCORDINGLY. 15. IN THE RESULT, APPEAL OF THE ASSESSEE IS ALLOWED AND APPEAL OF THE REVENUE IS DISMISSED. ORDER PRONOUNCED ON MONDAY, THE 03RD DAY OF JUNE, 2019. SD/- SD/- ( . / D. KARUNAKARA RAO ) ( ' # /VIKAS AWASTHY) / ACCOUNTANT MEMBER / JUDICIAL MEMBER / PUNE; !' / DATED : 03 RD JUNE, 2019 SB * + ,$-.' /')- / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT. 2. / THE RESPONDENT. 3. THE CIT(APPEALS)-1, PUNE. 4. THE PR. CIT-1, PUNE. 5. %&' () , * () , +,- , / DR, ITAT, B BENCH, PUNE. 6. './ 01 / GUARD FILE. // TRUE COPY // *2 / BY ORDER, 3 (- / PRIVATE SECRETARY * () , / ITAT, PUNE. 12 ITA NOS.376 & 398/PUN/2017 A.Y.2011-12 DATE 1 DRAFT DICTATED ON 28 .0 5 .2019 SR.PS/PS 2 DRAFT PLACED BEFORE AUTHOR 29 .0 5 .2019 SR.PS/PS 3 DRAFT PROPOSED AND PLACED BEFORE THE SECOND MEMBER JM/AM 4 DRAFT DISCUSSED/APPROVED BY SECOND MEMBER AM/JM 5 APPROVED DRAFT COMES TO THE SR. PS/PS SR.PS/PS 6 KEPT FOR PRONOUNCEMENT ON SR.PS/PS 7 DATE OF UPLOADING OF ORDER SR.PS/PS 8 FILE SENT TO BENCH CLERK SR.PS/PS 9 DATE ON WHICH THE FILE GOES TO THE HEAD CLERK 10 DATE ON WHICH FILE GOES TO THE A.R 11 DATE OF DISPATCH OF ORDER
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